Category: Credit

Obtaining a credit card for good credit maybe a dream for many credit card users, because majority of them have credit scores languishing somewhere between poor and average. With rising debts, job layoffs, and an overall bleak financial outlook, having and maintaining a good credit score has becoming increasingly difficult. But that should not deter us from trying to learn tricks and tips to boost our credit scores. All the trouble taken will be worth your while when you get approved.

As a starting point, you may want to compare credit card offers at DontSpendMore.com.

How to build good credit even without a credit card

Not everyone knows that good credit can be established even without a credit card to begin with. You credit score is a rating of your overall credit worthiness and this takes in to consideration all kinds of credit transactions like bank loans, car loans, mortgage loans, and even monthly utility bills. If you want to build good credit, you can take up a secured bank loan.

Inner workings of secured bank loans

A secured bank loan is a financial arrangement where the bank offers you a loan against some sort of security (or collateral). This security is usually an asset like property, gold, valuables or even your car. The criterion is that the market value of the asset that you provide as security is more (or near) than the value of the loan offered to you. Many factors will be taken in to account while valuating the monetary value of your asset like depreciation over time and life of your car etc.

Secured bank loans against fixed deposits

If you do not want to go through the hoops to get a credit card for good credit, you can also opt for a secured loan against a fixed deposit. Most of the banks will extend loans that are equal or slightly lesser in value than the amount of money that you have kept as fixed deposit in the same branch of the bank.

So if you want to build a good credit reputation fast, you could consider keeping at least $1,000- $2,000 as fixed deposit and then taking a secured loan. When you repay the loan in timely installments you will be building your credit reputation as well.

The credit bureau will monitor your payment history over at least a period of six months before deciding how to rate your credit score.

If you already have good credit (above 700), then you have nothing to worry about. Banks and credit companies will contact you with offers, but if your credit scores are not so good, then you have two choices. Either settle down for a credit card with higher rates of interest and lesser rewards or try to boost your credit score to make yourself eligible for a credit card for good credit.

Every credit card user and many of the non-users are familiar with the term ‘credit score’ and its importance in the process of getting a credit card issued. But very few people know the exact relation between the two and how to get credit cards by credit score approval.

A quick overview of credit score

I am tempted to give a quick overview of credit score even though you are familiar with the term, because I am sure that not everyone knows everything about it.

There are many theoretical expressions of credit score but I prefer explaining it in simple terms. Your credit score is nothing but a summary of your credit worthiness (and a summary of your history) expressed in numbers. So it obviously means that a higher number on your credit score equals higher credit worthiness and better chances at getting credit cards by credit score ratings.

How to know if your credit score is good, average, or bad?

More than knowing about the theoretical definition of credit score, everyone should be fully aware of the real value of their credit score. By value I do not mean the numerical value. Instead, I am hinting at the value of the credit score in getting credit cards by credit score evaluation.

There are some approximate ranges which can demarcate the good, bad, and the ugly credit scores. For example, credit scores between 0 and 500 are the worst of the lot because they have very poor credit worthiness and would perform the worst in any competition to obtain credit cards by credit score.

Credit scores between 501 and 650 can be demarcated as average performers and if your credit score falls in this average range, your application for a new credit card can be expected to face a lot more denials when compared to others with a better credit score.

Majority of the people who successfully obtain credit cards by credit score have credit scores above 700. If your credit score is higher than 650 then you can breathe easy, because even though you may not fare well when competing against credit scores of 700+, yet you have a lot of credit card options that are available for this range.

Credit scorers of 780+ are the true super stars when it comes to classifying consumers who are trying to get credit cards by credit score. These folks have nothing to worry about getting approval. Moreover, they also are considered as the blue eyed boys (and girls) by credit card companies when they are offering special and privileged offers and rewards; not to mention low APR rates as well.

If you know your credit score then it is easy for you to know where you stand in the rat race of credit cards by credit score. Another benefit of knowing your credit score is that you can apply for credit cards that are available for your specific credit score range. Applying to a card that has eligibility credit scores matching yours is a guaranteed way of getting approval.

Every credit card user knows that it is easier to get a credit card with good credit than getting one when your credit reputation is weak.

Many benefits for credit card with good credit

Your credit score or reputation is an important criterion in getting a credit card issued. In addition, if your credit score is good, there are many other benefits that come knocking on your door as well.

For instance, users who possess a credit card with good credit history are more likely to be offered lower interest rates. Such credit card holders will also find it easier to get an additional credit card issued.

How to establish good credit?

Considering how important it is to be labeled as a person who owns a credit card with good credit, you might want to first know about techniques and tips to establish a good credit reputation. In order to do that, you need to realize that credit reputation or score is not based only on your credit card usage alone. There are many other factors that are taken into account like your payment history for previous bank loans, mortgages, car loans or even medical bills.

In simple words, the most effective way to establish a good credit score is to pay all your bills on time. Doing this on a consistent basis will not only establish you as a credible person, but also as someone who knows how to handle his/her finances responsibly.

Once you manage to get this done, then you can look forward to owning a credit card with good credit reputation as well.

Things to avoid when you have credit card with good credit

If you already have a credit card with good credit reputation, then you should try to avoid certain things that may harm your credit score.

One trick to stay in control is to limit your credit card usage only for necessities. Unnecessary swiping of credit cards for every trivial purchase can not only inflate your monthly credit card bills, but also runs the risk of damaging your credit score if you cannot pay the bills in full each month.

Try your best to clear your credit card bills in full each month and on time. Many of us are too busy with our work and lives to remember paying the bills on time. Set up an automatic bill payment system by linking your bank account with your credit card bill payment to avoid this risk of missed / delayed payments.

Owning a credit card with good credit is not only a luxury but a responsibility as well. Try to maintain your good credit by applying the tips and suggestions in this article.

Credit cards often are a great help if you have financial difficulties but sometimes, it backfires in the form of high interest rates. However, not all credit cards have high interest rates. In fact, more credit card companies today offer low interest rates. So if you are wondering where you can get low rate credit card offers, read on and find out.

Credit union credit cards

Credit union credit cards are perfect if you are looking for low rate credit card offers. According to recent studies, credit union cards have significantly lower interest rates as compared to bank-issued cards. This is because credit unions are not-for-profit. Meaning, they do not have to increase interest rates to increase their revenue because they do not have to generate gains at all.

So if you are in the search for a low interest rate credit card, consider getting a credit union credit card. It provides the same purchasing power that bank issued cards provide but with less costly interest charges.

Introductory rate credit card offers

Despite having the reputation of giving high interest rates, bank-issued cards actually have great things to offer as well. For instance, many credit card companies have introductory low rate credit card offers and some even have 0% interest rate offers. So if you think that the only less costly cards available are credit union cards, then you are wrong.

However, introductory rates are only available for a limited period. For instance, 0% interest is usually only applicable during the first six to eighteen months of credit card use. Nevertheless, it is still a helpful way to save on interest charges despite having it for a while. So if you wish to get another credit card, make sure to find great deals on introductory rates.

Build a good credit score

Aside from credit union cards and introductory rates, you can also get low rate credit card offers from any card issuer by simply having a good credit score. Okay, maybe it is not that simple as most people only have average credit scores. However, there are things you can do to enhance your credit score.

For instance, if you have bad credit, you can gradually improve your credit score by slowly paying off all your debt. After doing so, see to it that you never miss a payment and are always on time, you will see the difference it makes on your credit score. If it is not possible to do this, then consider getting a card, which can help you boost your credit such as prepaid credit cards. They can help you build credit because you will not have to pay bills, thus, eliminating late payments and debt as well.

Interest charges are the most costly thing about credit cards but there are also low rate credit card offers nowadays such as 0% APR cards and credit union cards that can help you save money. Then again, the most important thing you have to remember is that interest rates do not matter at all if you simply pay your credit card bills in full every month.

Most of the people I know are desperately waiting to get a credit card, because they are looking forward to the extreme convenience that these plastic cards bring along. But things may not be so easy, and most of these credit card aspirants face a roadblock while getting a credit card approval.

The toughest part is that some of the criteria involved in getting an approval seem to change over time. For example, a credit score of 720 was once considered excellent for getting a credit card approval. But now a score of 750 seems to be the new excellent score. So, this post is all about tips, suggestions and criteria involved in getting a credit card approval.

Getting a credit card approval if you have a history of rejection

Most of the credit card applications are evaluated automatically with the help of software. This may explain why a person whose credit card application has been previously rejected faces the same fate on second application. But the best part about this automatic rejection is that there is usually a specific time period for which this record is maintained. While some banks may refresh their data in two weeks, some others may also take up to three months.

So if your credit card application was previously rejected, try not to reapply before a safe period of three months. Do not make the mistake of thinking that you can simply change banks and reapply for getting a credit card approval. This may not be a fool proof idea because many a time banks share a common credit information database and have access to all your financial history.

Getting a credit card approval with self employment status 

There are many people who are enjoying credit card facilities despite being self employed, and it is not a bad point at all. But credit card companies may not prefer extending credit to self employed individuals if their history reveals that this source of employment is less than a year or 6 months old.

In short, it means that if you are self employed individual, you may have to wait for at least 1 year after starting your business, before getting a credit card approval.

Incorrect facts hinder getting a credit card approval

Getting a credit card approval is a sensitive process and needs close scrutiny of various financial and other background facts. If your credit card application has any crucial info missing, incomplete, incorrect or false, it will hinder your efforts at getting a credit card approval.

You have to make sure that your application is up-to-date in all respects, before you click the submit button. Do not try to falsify information about your employment or contact address. Doing so will prove to be very detrimental in getting a getting a credit card.

Getting a credit card approval need not be tough and worrisome if you familiarize yourself with the basic facts and realities of the credit card approval process.

First, you must know that you will have limited credit card options, especially if you are just building your credit history (new credit). What you need to do is to focus on getting cards that afford you higher chances of approval, such as secured credit cards, student credit cards, and other similar cards for beginners.

There are many card types and reward programs nowadays, which make picking your first credit card like finding a needle in a haystack. So to help you find that elusive needle, simply go through the post below so you can come up with the best credit card for new credit.

Unsecured credit cards for starters

If you have no credit history, then entry-level unsecured credit cards may be a good place to start. Because such cards are for beginners, the credit limit is pretty low and the interest rate may be a little bit higher. However, the annual fees are reasonable and the card is easy to obtain, which makes it one of the best credit card for new credit.

Student credit cards

If you are a student currently enrolled in college, then student credit cards is the way to go. This card could be the best credit card for new credit because it is easy to get, provided that you are a college student and can demonstrate some proof of income.

Secured credit cards

If you have a tendency to overspend and you do not want to mess up your fresh credit with your first credit card, then you should get a secured credit card. With secured credit cards, you are required to make a security deposit, which in turn becomes your credit limit. For instance, if you deposit $500 into your credit account, your maximum spending limit will also be at $ 500. This feature is especially helpful if you are new to credit as it doubles as your guide to make responsible spending habits and also gives you a secure platform to get started. Of course, this is just one example. There are other types of secured credit cards as well. Therefore, if you want the best credit card for new credit, then this card type will surely be on top of the list.

Whatever credit card you choose to have, you have to know that credit cards are neither good nor bad. What makes them perfect for you depends on your preferences, your financial capabilities, and your overall spending practices. So, if you wish to get the best credit card for new credit, you have to take into consideration these three things as it will be your basis in determining which card type you are most suited for.

In general, all credit cards are great but sometimes, you may not find all credit cards equally helpful. This is because there are many types of credit cards and each has unique attributes. Consequently, figuring out which credit cards are the best may seem confusing at first.

Traditional credit card

Most commonly used, you can use this card type to make purchases but you cannot charge more than your spending limit. Usually, credit card companies base your spending limit on your income. Thus, the higher your income, the higher your credit limits. You can also use your traditional credit card to pay for certain bills provided that the service provider accepts credit card payments. In conclusion, if you prefer a fuss-free credit card, it is best to go with traditional credit cards. Still wondering which credit cards are the best. Read further.

Rewards credit card

Like the traditional credit card, you can also use a rewards card to make purchases or pay your bills. But as its name indicates, not only will you get to pay for stuff but you also receive rewards in return. It is for this reason that rewards cards have become very popular these days.

There are many types of rewards cards available for you to choose from depending on the kind of rewards or incentives you prefer. You can choose hotel point cards, retail rewards cards, gas point cards, airline points cards, and even cash back credit cards. All of these credit cards are excellent choices but in reality, you only let yourself get one or two and that makes it so much harder. However, it can be a lot easier to choose which credit cards are the best if you first determine which type of rewards are more appropriate for your lifestyle.

Credit repair credit card

Having numerous credit cards is fun (in terms of the purchase power it empowers you with) but sometimes, it can also hurt your credit if you cannot always pay your bill on time every month. There are certain types of credit cards that can help you boost your credit score, and one of which is the prepaid credit card. These do not “fix” your credit, but rather give you an opportunity to start rebuilding your credit.

A prepaid credit card is just like any other type of credit card except for the fact that you must first make a deposit on your credit card account before you can actually use the credit card. This unique feature is what helps you boost your credit as you can only make charges equivalent to the amount deposited, thus, regulating your expenses. So in choosing which credit cards are the best, consider credit repair cards too especially if you have bad credit.

Credit cards are aplenty nowadays and that is why it is important to learn the different types of credit cards so you can properly choose which credit cards are the best. In addition, you also have to determine your personal needs in order to pick out credit cards you can truly find useful and rewarding.

Credit card issuers base your interest rates primarily on your credit score. Thus, having a good credit score is essential to ensure you get low credit card percentage rates. Your credit score comprises of five determinants primarily: Your payment history, debt amount, credit age, types of credit used, and new credit. Now, depending on the scoring agency, there are other variables that come into play as well, but these are the major ones. Hence, it is crucial to know what you need to do to excel in all five determinants so you can boost your credit score.

Pay your bills on time

Credit experts always stress that paying your bills on time is essential to have a good credit rating. This is because credit bureaus receive reports regarding your payment history. In fact, even just a single missed payment can greatly damage your credit.  So if you want to have low credit card percentage rates, then you better start paying your bills on time.

Maintain a low credit card balance

The higher your balance is, the lower your credit score will be. Hence, you should never keep an outrageous amount of balance if you want low credit card percentage rates. Maintaining a balance, which is significantly lower than your credit limit is optimal for a good credit score. If you charge more than that, you risk getting deductions on your credit score even if you plan to pay it off right away.

The older your credit card is, the better

When you close an old credit card account, the issuing company halts reports to the credit bureaus. After about ten years, the credit bureau will remove the closed account’s history from your credit report thus, shortening your credit age. Consequently, your credit score plummets and you will get higher credit card percentage rates on your next application. Therefore, it is best not to close your old credit card accounts, as it will be a great help in enhancing your credit score. Remember, the older your credit card becomes, the higher your average credit age will be.

Credit card applications

Whenever you take out a credit card application, the issuer pulls your credit report. Such inquiries on your credit report make cause a temporary fluctuation but eventually it should come back to normal.

There are other ways to get low credit card percentage rates but the most effective one is to build a good credit profile. You may get low rates from promotions but this only lasts for a while. However, if you have excellent credit, you can always expect to get low interest rates if you maintain your credit score in good standing.

Establishing credit requires a considerable amount of time, patience, and perseverance. There are no surefire shortcuts or tricks that can lead you to a high credit score within a short period. Your credit score reflects your credit worthiness based on your payment history, credit experience and other financial aspects as well. As important as building credit may be, it is even more crucial that you take time in doing it the right way.

Having a low credit rating usually means difficulty in obtaining credit cards. However, credit card providers can give you a chance to establish your credit through certain credit card types such as those indicated below.

Department store credit cards

Department stores have probably asked you if you would like to sign up for a store credit card but you have politely declined. Some believe that store cards are unnecessary but this is a completely flawed idea. In actuality, there are two reasons why store cards are great if you want to start establishing credit.

One, obtaining store cards is easier as compared to bank-issued credit cards. Two, department store credit cards are very useful as you can use it on a daily basis for purchasing your everyday needs. So if you have difficulties getting a credit card from banks consider going to a department store and apply for a credit card. Just make sure that you find out if they report to credit bureaus because if they do not, then such card will do no good to your credit.

After you get the card, make sure that you constantly remind yourself to use it properly and responsibly. Never use it to overspend, but only think of it as a tool toward establishing credit. Just ensure that you only make reasonable purchases with it and regularly pay your bills in full and on time so you can build a good credit history.

One caveat here. Store cards may have their own fee structure and interest rate related costs. Read the fine print carefully to understand what these parameters are.

Secured credit cards

If you have tried store credit cards and failed, you can still have a shot at establishing credit with the aid of secured credit cards. Secured credit cards are much easier to apply for, however, you have to make a certain security deposit before you could avail of the credit card.

Typically, the credit limit on secured credit cards is equal to the amount of money deposited or the monetary equivalent of the property used as collateral. You can choose to increase your credit limit later on by adding more deposits but if your initial purpose is to establish credit, then doing so is not advisable.

If you fail to make payments on your secured credit card, the issuer takes the money deposited as payment for your debt. As in the case of properties secured, issuers will make necessary arrangements to satisfy the debt incurred.

Getting your first credit card can be very challenging and depressing especially if you get rejected frequently. However, with the proper knowledge, you can successfully obtain one and start establishing credit. With responsible payment practices, you can build a good credit and get any type of credit card you want later on.

If you have been paying even the slightest attention to the credit card offers that you come across so often you would have noticed that most of them mention something called intro APR.

Intro APR is generally for new customers

Well it denotes a special APR rate that is offered only to new customers who sign up before the introductory rates expire. This rate is applicable only to new customers for a specific duration of time.

More facts about intro APR

Intro APR rates are typically on the lower side and may even be up to 70% to 80 % lesser than the regular APR rates applicable for that same credit card without the promotional offer. Sometimes credit card companies also come up with zero percent annual percentage rates as a part of their introductory offer.

These intro rates are usually applicable only to new purchases initiated with that credit card within the promotional offer’s period. But some companies may also extend the low intro rates to balance transfers as well (or vice versa).

If you are thinking about signing up for a credit card because you are impressed with the intro APR rates, be sure to confirm whether these rates apply to balance transfers or purchases (or both). Read the fine print.

Focus on your priorities

The most important thing to note here is that these rates are not forever. So no matter how low the interest rates are now, they will definitely jump to double digits in the near future and that is where you should actually focus on.

Find out if the regular rates are going to be fixed or variable. All these factors will determine if the intro APR rates that you are being offered now are truly worth the excitement. Some intro APR rates could go as far as eighteen months. In fact, at DontSpendMore.com, you can find several credit cards with intro APR rates up to eighteen months.

I am only suggesting that if you ever decide to go with any credit card simply because of the intro APR rates, then compare with other cards and go for the one that offers a combination of lowest intro and regular APR rates.

Getting low or nil intro APR rates are a blessing for many of us. Just make sure that you utilize these concessions in the best possible manner and utilize the timeframe to your advantage. Pay off as much of the balance as possible during the low intro period. Ideally, you should try to become debt free within the promotional period itself.